Synthetix Proposes $13.2M Acquisition of Kwenta to Unify Protocol and Strengthen Market Position

Synthetix has put forward a $13.2 million token-for-token acquisition of Kwenta, intending to consolidate its operations and strengthen its decentralized

DeFi protocol Synthetix (SNX) has proposed to acquire Kwenta (KWENTA) in a deal valued at $13.2 million.

The acquisition will see Synthetix buy all circulating Kwenta tokens (532,375 KWENTA) for 9.05 million new SNX tokens, increasing the total supply of SNX by 2.8%. The token swap will be at a 19% discount to the recent average trading ratio.

As part of the deal, Kwenta’s treasury will be merged into Synthetix’s resources, while Kwenta’s governance structure will dissolve, transferring control to Synthetix’s Spartan Council.

Synthetix also intends to simplify liquidity access for current KWENTA holders through a token migration program, where KWENTA holders will exchange tokens for SNX vesting contracts. These vesting contracts will lock tokens for three months, followed by a nine-month gradual release schedule.

The acquisition is expected to enhance Synthetix’s decentralized derivatives platform and strengthen its market position in the rapidly growing DeFi derivatives space.

In a tweet, Synthetix acknowledged past mistakes, saying the 2020 spin out was a mistake that distanced the company from its users. The acquisition will allow Synthetix to get back in front of customers and improve perpetual products.

DeFi Derivatives on the Rise as Markets Shift

DeFi derivatives are gaining traction as investors are increasingly utilizing derivatives to gain exposure without committing the full capital.

A recent Financial Times article highlighted that derivatives trading now constitutes 71% of all digital asset trading volumes with open interest crossing $40 billion in 2024.

Following the collapse of major lenders in 2022, unsecured borrowing options have vanished, leading traders to explore derivatives as a capital-efficient solution.

The proposed acquisition is aligned with Synthetix’s strategy to expand its DeFi product offerings and capture a larger share of the derivatives market.